Here's Why Sprouts Farmers (SFM) is a Strong Value Stock
For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.
Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.
Why Investors Should Pay Attention to This Value Stock
Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.
Sprouts Farmers (SFM)
Sprouts Farmers Market, Inc., which operates in a highly fragmented grocery store industry, has a unique model that features fresh produce, foods section, and a vitamin department focused on overall wellness. Moreover, the company has been diversifying its offerings to meet changing preferences of consumers, who are looking for more health and wellness products. These products are generally plant-based, gluten-free, keto-friendly, and grass-fed. The company has been focusing on natural and organic food, which is one of the fastest growing segments in the industry.
SFM boasts a Value Style Score of A and VGM Score of A, and holds a Zacks Rank #3 (Hold) rating. Shares of Sprouts Farmers are trading at a forward earnings multiple of 17.1X, as well as a PEG Ratio of 2, a Price/Cash Flow ratio of 10X, and a Price/Sales ratio of 0.7X.
Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Eight analysts revised their earnings estimate upwards in the last 60 days for fiscal 2023. The Zacks Consensus Estimate has increased $0.04 to $2.79 per share. SFM has an average earnings surprise of 11.2%.
Investors should take the time to consider SFM for their portfolios due to its solid Zacks Ranks, notable earnings and valuation metrics, and impressive Value and VGM Style Scores.
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Sprouts Farmers Market, Inc. (SFM) : Free Stock Analysis Report
